Saturday, May 30, 2015

Is Najib and the BN Government responsible for the failure of Malaysian Airlines - and now the loss of employment for so many (some say 6,000 - 8,000), the union busting actions, etc...?

I gave you a job...and you failed - now,is it logical to ask the same parties to work out a proposal that will save our Malaysian Airlines? Note, in my opinion, the Independent Administrator together with the Independent Advisor should have been responsible with coming up with the proposal and the planned changes to implement the proposal - but then, it is only a few days ago that the Administrator has been appointed...No time now to even study the proposal and the plans, as he is now been asked to sign termination letters that is planned to go out in a few days. Would the Administrator allow himself just to be used...a mere 'rubber stamp'? We shall see...

Najib Razak is Prime Minister of Malaysia since 3/4/2009 - and this is important because MAS was a Government-Linked Company(GLC), whereby the majority shareholder was Malaysia’s sovereign wealth fund Khazanah Nasional, which now is the ONLY shareholder of MAS.

In 2007, they recorded a profit of RM852 million, the highest in MAS history, and followed up with RM522 million profit in 2009,...Two years after Idris left his post, MAS suffered one of the most historic losses in aviation industry, a staggering RM2.5 billion in 2011.They made a profit of RM430 million the following year, but lost RM1.16 billion in 2013.

Guess what? Najib is also the Chairman of the Board of Directors of Khazanah Nasional...

Dato’ Sri Mohd Najib bin Tun Hj Abdul Razak

And, Najib's brother is brought in as a Director - Dato' Sri Mohamed Nazir Abdul Razak. This, in my opinion, should not have happened - because he is the PM's brother who also happens to be Chairman of Khazanah. Being an adviser is OK but...

Dato' Sri Mohamed Nazir Abdul Razak

Dato' Sri Mohamed Nazir Abdul Razak

Dato' Sri Mohamed Nazir Abdul Razak was appointed as a Director of
Khazanah Nasional on 1 September 2014. He is currently the Chairman of
CIMB Group. Dato' Sri Nazir was the Group Managing Director/ Chief
Executive Officer of CIMB Group between November 2006 and August 2014.

Now, it is very easy to shift the blame to the CEO and management of MAS, but we all know that the power really rests with the Board of Directors - they appoint the CEO, they approve the plans... Ultimate power rests with the shareholders, and in this case 100% of MAS (and possible the new company, MAB, rests with Khazanah.

Now, for a Company, the primary object is business and profits > hence terminating employees is all seen merely from a business perspective.

On the other hand, a Prime Minister being the head of government should primarily be concerned for the well-being of people - and that includes also all these workers. A Prime Minister should also be concerned about workers' rights and unions - but alas, it becomes complicated when Najib is also the Chairman of the Board of Khazanah. Now, we have also lost the ability of our PM and the Cabinet to oversee, act as check and balance, etc to what Khazanah is doing...

In short, it looks like now it is PM Najib that should be blamed for all of MAS's failings... Some have been talking that they intend to appeal to the Prime Minister to intervene to ensure justice for the workers and the unions... but how is that possible - if you go meet the Chairman of Khazanah, you are meeting the PM. If you go meet the PM to complain about what Khazanah is doing, you really are meeting with the Chairman of the Board of Khazanah...

The biggest worry now is that all the plans for saving Malaysian Airlines is now being done by the very same people who caused the failings. There really should be a Parliamentary Committee established to monitor all - without that, we may be doomed to another failure in the not too distant future...

The 21 years of mismanagement that brought MAS to its knees

By RAM ANAND

Published: 27 May 2015 6:59 AM

National
carrier MAS has suffered years of mismanagement and previous efforts to
steer the company on to better fortunes failed to deliver the results
hoped for, say most observers. – The Malaysian Insider file pic, May 27,
2015.

Beginning September, Malaysia Airline System Bhd,
the company Malaysians know as the national carrier since 1972, will
cease to exist.
It would instead be replaced by a new company, Malaysia Airlines Bhd,
to be fully owned by Malaysia’s sovereign wealth fund Khazanah Nasional
before a planned re-listing in Bursa Malaysia by 2019.
This, however, is not the first time MAS has been subjected to a
turnaround plan or a bid to save the airline. It has happened several
times over the course of 22 years, beginning in 1994.
This is the most comprehensive restructuring plan that MAS has been
subjected to though. One that will involve a rigorous cutting down of
its air travel routes and its workforce, likely to reduce it to a
regional airline.
But this will only work if the government and those helming this restructuring plan heed the lessons of the past.
It all began in 1994 when businessman Tan Sri Tajudin Ramli took loans
from several government-linked companies totalling RM1.79 billion and
then used the money to buy a controlling stake in MAS, a move that cost
the government dearly some seven years later.
Then the CEO of MAS, Tajudin was badly affected by the 1997 Asian
financial crisis, and the government eventually bought MAS back from
Tajudin for RM8 a share - the exact price Tajudin had paid seven years
before. The only difference was, this time, MAS was lingering near
bankruptcy.
It had bled RM256 million in the fiscal year ending 1998 and by the
fiscal year ending 2000, it bled a further RM255.7 million after tax
losses. When the government bought back the controlling stake from
Tajudin, the share price on the market was only RM3.68 per share.
Government linked company Danaharta eventually opted for an out of
court settlement with Tajudin despite winning a legal case over the
RM589 million in loans owed by Tajudin to the company.Back
in the government’s hands, MAS reported a loss of RM 1.3 billion in
2005, prompting another turnaround plan that saw them appoint current
Performance and Delivery Unit (Pemandu) chief Datuk Seri Idris Jala
(pic) as its CEO.
For many, Idris’ tenure was the only silver lining for a company that has otherwise made a habit of bleeding money annually.
In 2007, they recorded a profit of RM852 million, the highest in MAS
history, and followed up with RM522 million profit in 2009, just before
Idris took over as Pemandu CEO under Prime Minister Datuk Seri Najib
Razak’s administration.
But for DAP’s Kluang MP Liew Chin Tong, a keen observer of MAS history
over the years, the current state of MAS necessitates calling into
question the sustainability of what Idris did during his time helming
the airline.
“His whole tenure should be called into question. It shows that his
turnaround had not succeeded, as what he did was to basically cut the
muscle of MAS – he cut the expenditure, killed the morale of the staff,
and he killed that talent pool,” Liew told the The Malaysian Insider.
He said that for all of MAS’ troubles, the workers have become an easy “punching bag” for the company.
MAS is expected to sack their entire staff and only retain about
two-thirds of them for the new company, meaning that more than 8,000
people stand to lose their jobs.
“The way Idris handled MAS, resulted in a huge number of talented
people deciding to move away – it’s a vicious cycle. The current CEO
(Christoph Mueller) is doing exactly the same thing,” he said.
Liew said that the company is currently merely “chopping people’s jobs” to have a turnaround of fortunes.
“You have to ask if MAS actually has the talent and the morale to carry
on. After all, you are running a service industry,” he said.
Two years after Idris left his post, MAS suffered one of the most
historic losses in aviation industry, a staggering RM2.5 billion in
2011.
They made a profit of RM430 million the following year, but lost RM1.16 billion in 2013.
In 2014, they lost two planes – first on March 8, flight MH370, en
route to Beijing from Kuala Lumpur, disappeared while leaving Malaysian
airspace. What happened to the plane remains one of the biggest
mysteries in aviation history.
Just four months later, on July 17, flight MH17, en route to Kuala
Lumpur from Amsterdam, was said to have been shot by a ground-to-air
missile while flying 30,000 feet over a conflict zone in Ukraine. None
of the 298 passengers and flight crew survived.
These incidents forced Khazanah to finally de-list MAS and take it
private last year, paying RM1.38 billion to compensate minority
shareholders, before embarking on this major restructuring plan.
The latest state injection into MAS, from Khazanah, will be RM6 billion.
But, this was not the first time the state has injected money into MAS.
Over the past 10 years, MAS is estimated to have lost RM10 billion of
state money that was injected into it, according to former Prime
Minister Tun Dr Mahathir Mohamad.
Overall, it is estimated that MAS lost upwards of RM20 billion of taxpayers’ money since 1994.
When it recorded its RM1.16 billion loss in 2013, the airline was bleeding between RM4 million and RM5 million daily.
The latest injection may not be the first, but with MAS having suffered
such heavy losses for two decades now, the latest revival attempt will
likely be a final attempt at putting the national carrier’s accounts
back in the black. – May 27, 2015.

Thursday, May 28, 2015

UNJUST - All 20,000 employees of Malaysian Airline System Berhad will be terminated - and they are all justly entitled to Termination or Lay-Off Benefits, irrespective that some are later employed by a NEW legal entity - Malaysian Airlines Berhad.

If it was simply a case of a name change of Malaysian Airline System Berhad to 'Malaysian Airlines Berhad' - then you could just pay termination or lay-off benefit to the employees that are being laid-off or retrenched - but this is not the case. Malaysian Airlines Berhad is a totally new company. LET US NOT FORGET THAT WORKERS ARE HUMAN BEINGS - THEY CANNOT BE HANDED OUT TO SOME OTHER EMPLOYER LIKE THINGS/COMMODITIES.

Malaysian Airline System Berhad, the soon to be former employer, should justly be paying Termination or Lay-Off Benefits to all the employees they are terminating.

Now, they are saying that they are only going to pay this 'TERMINATION BENEFIT' to Unionized employees who have a Collective Bargaining Agreement(CA) - well, what about employees who are not members of the Union - will they be sacked with no 'termination benefit' or 'separation package'? . This is so unjust.

What about Unions, that MAS have been fighting their recognition in court, who because of this still have no CA. One example is NUFAM (National Union of Flight Attendants Malaysia). Only after the employer recognition is obtained, can a Union enter into a CA. Will members of these Unions also be sacked with no 'termination benefits' or 'separation package'? This again is so unjust...

The fact that there is also a provision for those who have been employees for more than 10 years is most disturbing. WHY? Because length of tenure will not be a factor of consideration for employment in MAB. There is a principle in law about retrenchment/lay-offs which is called LIFO (Last In First Out) - which sadly may be ignored here. It is true that it is not applicable here because the Old Company is terminating all, and the New Company is hiring its new employees BUT given the fact that the owners of Old and New Company is the SAME, and further that the owners is a fully owned Government Company, it would have been best that this LIFO principle was adopted.

Older longer serving loyal employees have much more financial commitments (children, home loans, etc...) and obligation, and it is also more difficult for them to find new employment in the current market. This is especially for the 'blue-collared employees'. Even if they do find new employment, it may not pay the same or more - but more likely be a lesser paying job. They also will have greater difficulty moving family to some other town where the new jobs may be. That is why the LIFO principle is fair.

Updated:
Wednesday May 27, 2015 MYT 7:20:43 AM

A better MAS layoff deal

by b.k. sidhu

PETALING JAYA: In a last minute
change of heart, more than a third of the 20,000 Malaysia Airlines (MAS)
staff will be getting termination payments according to their
collective agreements (CA).

The move reverses earlier reports that the payments would be about
half of what is spelt out under the CA, something which left the staff
very unhappy.

Some say MAS had bowed to pressure from unions to finally give such
terms, but a source close to the matter claims “they had always been
working on this suggestion but the unions did not know about it”.

Whoever’s idea it may be, the unions appear to have managed to reach
the corridors of power to intervene on the severance package.

Yesterday, the airline’s nine union leaders were told that the staff
payout would be according to the CA and this was received with much
cheer at a meeting held at MAS with the airline’s parent body Khazanah
Nasional Bhd and MAS officials.

A large chunk of MAS employees are unionised.

“It is a welcome move. It is politically and morally the right thing
to do, to pay according to the CA. That is what we should get and what
we deserve.

“Fortunately, they did not use the MAS Act 2015 to circumvent.
Unfortunately, not all of us will be re-hired by MAS Bhd,” said an
employee.

Christoph Mueller, the CEO of MAS, was not present at the meeting,
but he sent a memo to his staff late yesterday evening disclosing the
latest details which were “in line with the Prime Minister’s commitment
that MAS restructuring reflect fairness, compassion and transparency”.

MAS is scheduled to axe between 6,000 and 8,000 staff over the next
one year as part of its plan to shrink into a smaller airline with
regional focus. The remake of the airline involves the migration of
assets and liabilities of the existing MAS to a new company known as MAS
Bhd, which will rehire two-thirds of the workforce.

Those not offered jobs with MAS Bhd will be given one month basic
salary for every year of service for those up to 10 years of service.
Those who have served MAS for more than 10 years will get 1.5 months of
salary for every year of service.

The memo said senior ­management employees (vice-president and above) and those on contract were not subject to such terms.

Those accepting the offer to join the new MAS Bhd, will be offered a
sign-on payment and if they are still with MAS Bhd after 18 months, will
get a retention payment.

Khazanah had initially set aside RM1.66bil for staff payouts but
since they are now paying according to the CA, the total payout will be
higher with some suggesting it may be as high as RM2.4bil.

Due to the change in heart, the 20,000 termination letters that were
supposed to be distri­buted today by the airline will not go out as
planned. But MAS is working furiously to have the letters sent out over
the next few days so the staff will still get them around June 1. Those
rehired will have until June 12 to accept the offer.

“The unions have also asked that the retiree benefits of four tickets
per year at discounted prices remain but MAS officials said they needed
more time to deliberate on it,” said a source.- Star, 27/5/2015

Finally, it is happening - all MAS in-house trade unions will die. It is most disappointing that it seems that these unions and its members did not do much to fight for the rights of MAS Employees, and their unions. A perusal of reported news tells us this (we do not know what was happening behind close doors) - but the employees never even picketed, let alone strike, something that would have happened in most countries. We are talking of all the about 20,000 employees of MAS losing their jobs. I blogged about this in 2014.

Even most disturbing is the fact that MASEU seems to be more concerned about what to do with the assets of the Union once it ceases to exist - 2 Extraordinary General Meetings(EGM). They are talking about forming a cooperative ....of what? MAS Employee Alumni?

Did the UNION have any EGMs earlier to talk about fighting for their members' rights? Have they given up now - when there is still time to fight for the rights of the MAS employees.

Was the leadership compromised into apathy and silence? The Unions still have a duty to fight for justice and worker rights - or have they all given up?

No room for staff unions as MAS ‘reboot’ takes off in September

In this April 10, 2014 file photo, a Malaysia Airlines crew walks
into a check in area at Kuala Lumpur International Airport in Sepang,
Malaysia. Photo: AP

MASEU, which represents some 13,500 MAS
employees, is expected to be dissolved as the new management has
indicated that the union did not have a place in the new company, which
will start operations on Sept 1. The union, resigned to this for the
moment, is looking at turning itself into a cooperative in the new
entity.

MASEU executive secretary Mohd Jabarullah Abd Kadir
confirmed this and told The Malaysian Insider that two extraordinary
general meetings had been held recently to discuss the possible
dissolution of the union.

“We’ve decided in the meeting that firstly, we
will have to dissolve the union and secondly, maybe turn it into a
cooperative,” he said.

Mr Jabarullah said although the
union had held two extraordinary general meetings, the most recent being
on May 18, the matter would still need to be discussed further and
members will have to vote at another meeting. “We will make this a
secret ballot to find out what the members want,” he said.

Mr
Jabarullah said the union had to take this drastic measure because
under Khazanah Nasional Berhad’s plan to return the troubled airline to
profit, the new management does not recognise the union.

Saddled
with debts and the twin tragedies of MH370 and MH17, the government
through its investment arm Khazanah Nasional, is on a last-ditch effort
to revamp the ailing MAS.

It was reported that the
service of 20,000 MAS employees would be terminated but two-thirds would
be re-hired by a new company, MAS Bhd, which will begin operations on
Sept 1.

It was understood that the new company wants to form a union consisting of its own people, who are friendly to the management.

Mr
Jabarullah said the new management’s reluctance to recognise MASEU as a
union stems from the new MAS Act which is at odds with the Employment
Act 1955.

It was reported that MAS has an existing
workforce of 20,000, of which some 6,000 to 8,000 are expected to be
laid off by Khazanah as part of its RM6 billion (S$2.23 billion)
restructuring plan.

There are at least nine workers unions and associations in
MAS. Apart from MASEU, others include the National Union of Flight
Attendants Malaysia, which represents about 1,500 cabin crew members,
Malaysia Airlines Employees Union Peninsular Malaysia and the Malaysia
Airlines Pilot Association.

Mr Jabarullah said staff will
probably receive two letters – the first one for termination of their
services with MAS and the second, either an offer to join MAS Bhd or to
report to the Corporate Development Centre, set up to retrain the sacked
workers.

Meanwhile, a MAS engineer identified as Mr Shukri
said that with the dissolution of MASEU, he and others are worried
whether the welfare of workers will be protected in the new company.

“It seems that the union can’t do anything, they’re going to have to be dissolved.

“With MAS gone, automatically the union will be finished. Most likely the new company might not have any union at all,” he said.

Meanwhile,
Malaysian Trade Union Congress secretary-general N Gopal Kishnam said
MASEU should not take such a drastic measure. “It is not proper, why do
they want to dissolve the union. They should continue to fight for the
workers’ rights?” he said.

This came after Khazanah
unveiled a 12-point plan to enable MAS to achieve sustained
profitability within three years of de-listing, by the end of 2017.

Its
managing director Azman Mokhtar said the plan involved a comprehensive
overhaul of the airline and has four categories which are governance and
financial framework, operating business model, leadership and human
capital, and regulatory and enabling environment. THE MALAYSIAN INSIDER- Today Online, 28/5/2015

Tuesday, May 26, 2015

Who are the one making the plans for Malaysian Airlines? Should it not have been the INDEPENDENT Administrator that prepares the proposals.... which then is considered by the INDEPENDENT Adviser - This proposal is then submitted to be approved or not...well that, I believe, was the check and balance provided by the Malaysian Airline System Bhd (Administration) Act 2015.

And it looks like he has been appointed just in time to 'sign the letters of termination of employees' which is coming up soon...in a few days time, the end of the month.

Today, an administrator will be appointed. He is Datuk Mohammad Faiz
Azmi, executive chairman of the consulting and audit firm
PricewaterhouseCoopers. He will sign all the termination letters, which
will be sent out on Wednesday.

So, it looks like the present MAS Board is the one that has come out with the proposal to save MAS? Odd - for the MAS Act suggested that he would have been the one re-negotiating contracts and preparing proposals...

17 Administrator may re-negotiate contracts or prepare proposal or both(1) The
Administrator may, in the administration of the Administered Companies,
at his sole discretion, take any one or both of the following actions:

(a) re-negotiate the terms and conditions of any contracts or agreements of the Administered Companies with the counterparties;(b)
prepare a proposal with respect to the Administered Companies or any
claims and liabilities against or of the Administered Companies.

But alas, alas the appointment just happened - would the Administrator be able to even peruse the proposal - or determine whether employees need to terminated or the number that need to be re-hired. Would he even have time to consider make an Independent proposal for the lay off or termination benefit that ALL employees of MAS will be paid. Note that those who will be re-hired will most likely be re-employed by a new company, Malaysia Airports Berhad(MAB).

Should there not be at the very least a Parliamentary Select Committee (or some Parliamentary Committee) monitoring matters since our money is being used to SAVE Malaysian Airlines? Now, it seems that it is the MAS Board and maybe the shareholders that is making all decisions.

The appointment of the administrator will facilitate the transfer of
selected assets and liabilities from MAS to the new company, Malaysia
Airlines Bhd (MAB), effectively by Sept 1,2015, said Khazanah in a
statement.

MAS would continues to operate throughout the period up to and including
Aug 31 2015, after which MAB will operate the business of the airline
from Sept 1, 2015 onwards, it said.

The appointment is a voluntary undertaking by Khazanah and is made
pursuant to the Malaysian Airline System Bhd (Administration) Act 2015
(MAS Act), which was passed by both houses of Parliament last year.

The MAS Act provides for an effective, efficient and seamless means for
the transition of the business, property, rights, liabilities and
affairs of MAS to MAB.

The transition from MAS to MAB is a key component of the 12-point MAS
Recovery Plan (MRP), which was announced on Aug 29, 2014, to restructure
the national carrier and set it on a path towards sustainable
profitability.

The MRP also includes conditional investment funding by Khazanah of up
to RM6 billion, disbursed on a staggered basis and subject to the
fulfillment of strict conditions.
– Bernama

It will either be tears of joy or anguish for 20,000 MAS employees

PETALING JAYA: Anxiety is at its
highest and morale lowest for the 20,000 people working for the national
airline. It will either be tears of joy or anguish when they get their
termination and re-employment letters in a matter of days.

Malaysia Airlines (MAS), one of the country’s biggest
government-linked companies, will terminate its entire workforce to
start afresh as a smaller airline with a regional focus rather than
international.

The only person spared is chief executive Christoph Mueller, who was
hired to lead the new airline but was then roped in to manage the
transition.

No GLC in Malaysia has ever sacked nearly everyone and this could
well be the most number of people ever sacked in one day in Malaysia.

But this is part of the last-ditch effort to remake MAS, saddled with
debts for several years now, even before the twin tragedies of MH370
and MH17.

Today, an administrator will be appointed. He is Datuk Mohammad Faiz
Azmi, executive chairman of the consulting and audit firm
PricewaterhouseCoopers. He will sign all the termination letters, which
will be sent out on Wednesday.

Said one MAS staffer: “I thought a GLC was the safest place to work
in, but now I don’t even know if I will have a job on June 1.”

The staffer, who did not want to be named, said: “It is a very sad
period in our lives. I never thought this day would come when I first
joined the airline more than two decades ago.

“I cannot even think about how I am going to pay for my house and car loans.’’

The termination is aimed at easing the migration of MAS into a new company, MAS Bhd, which will begin operations on Sept 1.

The appointment of administrator marks the beginning of the eventual
end for MAS as an entity as Faiz’s job will be to clean up MAS for
closure and transfer all the assets and liabilities to MAS Bhd, as
provided for in the MAS Act 2015.

About two-thirds of the 20,000 staff will be offered jobs with new conditions.

It was reported earlier that 6,000 staff would be axed but sources
now say that in effect, it is that 6,000 roles that could be cut and
some of those roles could be done by more than one staff.

So sources say the final number of staff asked to go could be over 8,000, but in stages over a year.

“The 6,000 will be terminated at the same time, but some will be released in phases to manage the transition.

“Some will be offered short-term contracts in MAS Bhd,’’ said a source.

Staff can expect to get two letters – one for termination of their
services with MAS and the other either an offer to join MAS Bhd or an
invitation to report to the Corporate Development Centre (CDC), which
has been set up to retrain axed workers.

“No jobs are safe but some people obviously are,” said one staff.

He hoped the existing management team would not be rehired to manage the new MAS but sources dashed that hope.

They say the long blades may not come out for the senior management, as Mueller needs a proper transition.

It’s not quite Mueller’s style, going by his own words. In an
interview with Cambridge University business school last year, Mueller
said the first year of a restructuring was like going to war and it was
“difficult to create a winning team from an existing management team in a
turnaround”.

Whatever his strategy, Mueller is busy working out a tough business
plan for the new airline. Even the 3,779 supply contracts are being
redone under new terms, including the controversial catering with
Brahim’s Holding Bhd, now changed to a shorter term with prices slashed
by a quarter.

A large number will have to leave immediately but will receive their salary and benefits only at the end of August.

The CDC will open on June 1 to offer free outplacement and training services for staff.

This week CDC has set up kiosks at MAS premises, particularly at cafeterias, but this has not gone down well with the staff.

“They are insensitive. Even before we get letters they are already
doing this. I cannot even have a decent meal now,” said an employee.

Those axed will be paid compensation, but the amount may not be as much as under the collective agreement (CA).

Even those rehired by MAS Bhd will get some money in the form of a sign-on bonus, but the formula is not known.

A source said that given the financial state that MAS is in, it will
not be able to offer the payout formula as stated in the various
collective agreements – one month for every completed year of services
and one month and a half for those above 10 years.

The source said the selection of staff to be rehired would be based on performance.

“MAS will know how many of those offered will take up the new offer to join the new airline by June 12.

“It should have a contingency plan in place if the numbers don’t match what they expect.

“In any case, pilots and crew are in demand as several airlines,
including Korean Airlines and Qatar Airways, recently conducted
roadshows to lure MAS crew,’’ said a source.

Managing the fallout is going to be MAS’ biggest test because there
will be staff who will be disgruntled after getting their letters.

“But safety and security remain MAS’ top priority,” the source added.

MAS has also roped in all members of its management team to be
counsellors and more will be trained this week to talk to the staff,
especially those who will be axed.

Chronology of MAS

Oct 12, 1937: Malayan Airways Limited (MAL) was born.

April 2, 1947: MAL took to the skies with its first commercial flight as the national airline.1963: With the formation of Malaysia, the airline changed its name to Malaysian Airlines Limited.
1965: With the separation of Singapore from Malaysia, MAL
became a bi-national airline and was renamed Malaysia-Singapore Airlines
(MSA).
1972: Malaysia and Singapore went their separate ways. Malaysia
introduced Malaysian Airline Limited, which was subsequently renamed
Malaysian Airline System and branded as Malaysia Airlines.
September 2011: Ahmad Jauhari Yahya was appointed as the new Chief Executive Officer after a major restructuring to the Board of the Company.Feb 1, 2013: Malaysia Airlines became a full-fledged
member of oneworld alliance, connected to some 850 destinations in 150
countries across the oneworld
alliance network.December 2013: Three-year losses ending Dec 31, 2013 amounted to RM4.1bil.
March 8, 2014: Malaysia Airlines Flight MH370 disappeared while
flying from Kuala Lumpur to Beijing. The aircraft was carrying 12
Malaysian crew members and 227 passengers from 15 nations.July 17, 2014: Malaysia Airlines Flight MH17 that was
flying from Amsterdam to Kuala Lumpur crashed after being shot down in
Ukraine, killing all 283 passengers and 15 crew on board.
August 2014: Khazanah National announced its intention to
purchase remaining ownership from minority shareholders and de-list the
airline from Malaysia's stock exchange, thereby renationalising the
airline. May 1, 2015: German-born Christoph Mueller took over as
Malaysia Airlines Chief Executive Officer.
May 15, 2015: It was reported that letters of employment and
termination would be couriered to the workers’ residential addresses
beginning May 27. - Star, 25/5/2015

Monday, May 25, 2015

Najib too quick to shift blame on traders for price increase - but really, the fault should lie with the PM and the BN government.

On paper, there really should have been no price increase - in fact a drop in prices considering the fact that the old taxes that the GST replaced is at the same rate or lesser.

"We have abolished SST of 10, five per cent, some people do not know about SST before, the problem (abolition) is, it should have reduced prices

So, why has the prices risen? Well, let us look at the factories and wholesalers/suppliers - have they reduced the prices of the products they provide the traders? Has it been reduced by 6% or more(depending on the earlier applicable taxes)? Well, if they are selling still at the old price - then should we not be taking action against them?

Second - do not forget that by this BN Government policy - business operating cost of the traders have increased. How?

Well, you needed to get the relevant machines and programs, and these cost between RM10,000 - RM15,000

Well, now NEW staff was needed to input data in this new hardware/software, make the necessary calculation, prepare GST submissions > the government totally failed to appreciate that many of the old 'traders' were computer illiterate, and did not have the capacity to be able to handle the GST and matters related. So, for a new staff(2 maybe if the operation hours were more than 8 hours) - additional RM2,000 per staff (RM4,000 if 2) monthly or will it be more?

Third - a failure to realize that many traders never paid the suppliers the full some for the products when it arrived. There were various forms of business arrangement - most common is that payment only made after product sold. But the GST fails to appreciate this - requiring the trader to pay the 6% GST when the product arrives from the suppliers, and before it has been sold >> These traders will thus have to pay GST even before they manage to sell a product >> and now for items that arrive at the shop costing RM10,000, they have to already pay GST - RM600. This is money paid out before the items are sold. Yes - you can reclaim money paid if goods not sold later on...

End result, is that the cost of doing business for the trader, retailer have all increased - all because of GST. Many of these businesses are really small businesses ... and to compensate all this increases in cost of doing businesses, it comes as no surprise that customers end up paying...

Now, the government is going after those that have increased prices...of 'roti telur' - should not the retailer/businesses have a right to sell roti telur at whatever price they want? Try having a roti telur at some hotel or even some 'high-class restaurant' - guess what the price is so high. So, why not take action against them too.

Then let us look at how costs of houses are pushed up so unreasonably in Malaysia - no price control? No action?

GST - well, all the government should have done was to collect it in the same was it was doing the old sales and services taxes. The whole system of forcing the end retailer/trader to calculate and pay it is where the BN government made a big fumble - and caused the people great suffering. Points of production was the best place to collect these taxes - and that value would have gone into the prices.

So why did this BN government do this?

So, who profited? Well, in my opinion, it would be the people who were selling the hardware(computer,POS systems) and certainly the computer program? Was there copyright - requiring people to pay annually to be able to continue using the program?

It is sad, that with this government's price control efforts - focus is on the price of sale to consumer - the retailers,'traders', etc. Price control, must in fact start at the factories(or other points of origin), the middle-man, the wholesalers, the suppliers,...if not unjustly, the only business person that suffers is the person that finally sells to the ordinary consumer.

What if the government discontinues GST... or even go back to the old system where GST is collected at the point of origin of the product, well will the government buy back the GST machines and programs?

The whole idea of the GST and the manner in which it was implemented makes everyone suffer, and fault should lie with Najib, being the Prime Minister, and this BN government. Najib should not be blaming traders - or going after 'roti telur' sellers.

Why is the government not going after the BIG businesses - well Gardenia Bran & WheatGerm bread was selling at RM2.40, but after GST it is sold at RM2.55? [And, this price increase is not done by the retailer, I believe]

Pos Malaysia is charging GST for service charge...?

Traders exploit GST and burden people

Posted on 23 May 2015 - 04:48pmLast updated on 23 May 2015 - 06:02pm

GOPENG: The action of some traders who
exploited the Goods and Services Tax (GST) has burdened the people when
the tax system was implemented last April 1, said Prime Minister Datuk
Seri Najib Abdul Razak.

He said the traders should have reduced the prices after the Sales
and Services Tax (SST) was abolished but they did not do so and instead
took the opportunity to raise prices by six per cent using the GST as an
excuse.

"The GST issue is caused by traders, these traders are evil, they are
not responsible, not the government, we have other policies.

"When traders exploit the situation, the people blame the government and prime minister.

"Everyone want to step on my head even though my heart's intention is
to strengthen the country's finance and people's welfare," he said when
speaking in front of over 20,000 people during a working visit to the
Gopeng Rural Transformation Centre (RTC) here today.

"We have abolished SST of 10, five per cent, some people do not know
about SST before, the problem (abolition) is, it should have reduced
prices but another six per cent is added, this is the cause.

"If want to be angry, get angry with the traders, they must be blamed
because they do not have compassion to think about the people's
interest," he said.

The prime minidtyer said through the GST system, the country's
revenue will increase and many aid could be channeled to the people,
including from the aspects of infrastructure and people's needs.

"If BR1M ( 1Malaysia People's Aid) needs to be increased, I can do
so, if roads need to be increased, I can do so, if government employees
want to have additional bonus and pension, it can be considered," he
said, adding that the government could do these on condition there were
financial sources.

Hence, Najib asked the relevant authorities to intensify enforcement and act more firmly to take errant traders to court.

"Sue them (traders), consumers please inform us their offences so that we can take action," he said.

Najib said the government had expected such kind of problems to occur when the GST was implemented in the country.

As such, he said the government took steps to raise the BR1M aid from RM650 to RM950.

He said GST related issues were expected to be settled within a period of one year.

"I will table to the people every ringgit of the country's addidtional revenue related to GDT for the public's knowledge.

The prime minister also denied allegations that the BR1M disbursement
had made the recipients more lazy but said it helped to ease the burden
of the low income group.

"The disbursement is not to make people lazy or addicted but if they receive BR1M, they can buy rice and their children's milk and school uniform.\

"The people need assistance and with this RM950, many things can be
done if spend wisely. There is nothing wrong to give BR1M because
developed countries also have such a system," he said.

Najib said the BR1M disbursement was aimed at increasing the
consumers' power, which in turn profited the traders and caused the
local economy to grow.

He said the government abolished the oil subsidy, namely bulk subisdy
that was more favourable to the rich and the BR1M disbursement was a
targeted subsidy that gave attention to the poor and needy.

"The oposition also get (BR1M), sometimes they are the first to ask,
but never mind, support or not, that is another question because the
government is responsible to help the people who need assistance," he
said. – Bernama - The Sun Daily, 23/5/2015

Restaurant with 'roti canai telur' at RM2.50 raided

A famous 'nasi kandar' restaurant in Bukit Jambul
was raided today by the Enforcement Division of the Domestic Trade,
Cooperatives and Consumerism Ministry, Penang for selling 'roti canai
telur' at RM2.50.
State ministry enforcement deputy head Chin Ching Chung said the
inspection was carried out at 10.40am after the department received a
consumer's complaint that the price of 'roti canai telur' before the
implementation of the Goods and Services Tax (GST) was RM1.80.
"The restaurant operator is given three days to submit relevant
documents and reasons for raising the price before enforcement action is
taken," he said when contacted.
He said if the operator failed to give reasonable explanation for the
price rise within the stipulated period, action could be taken under
Section 21 of the Price Control and Anti-Profiteering Act 2011.
"If the operator concerned is found to make an excessive profit margin,
he can be prosecuted under Section 14 of the same act," he added.
Chin said further investigation revealed that the price of 'roti canai
telur' at the restaurant had been raised several times before April from
RM1.80 to RM2.20 and the latest to RM2.50 after the GST.
- Bernama - Malaysiakini, 23/5/2015

Sunday, May 24, 2015

What? PM Najib is not telling the truth again - he says ‘We have only implemented the minimum wage policy for about a
year and five months…’ (Malaysian Digest, 3/5/2015, ‘Too soon to review
minimum wage’ – Najib)

Wrong PM Najib - Workers in Malaysia started enjoying Minimum Wages on 1/1/2013 - that is 2 YEARS 4 MONTHS 21 DAYS AGO

Implementation of Minimum Wage Policy by this BN Government starts on about 2010 - when the government started steps to enact the necessary law - then later on 16 July 2012, we finally had our first Minimum Wage Order.

MTUC is right to say that the next Minimum Wage Order should have come out latest by 16 July 2014 - and as such, there is a long delay - about 10 Months now.

Wait - the Law would not have been followed because it says review at least once every 2 years? Since, the last review resulted in the Order of July 2012 - Can we say that the law was not followed?

See earlier post for MTUC's full statement -

Raise minimum wage now, says MTUC

The law requires a review every two years and Putrajaya has missed the deadline.

KUALA LUMPUR: The Malaysian Trades
Union Congress (MTUC) has demanded an immediate review of the minimum
wage rates, pointing out that Putrajaya has missed the legal deadline to
do so.

The last Minimum Wages Order was issued in July 2012 and a new order
should have been out by July 2014 to take effect from January 1, 2015,
MTUC Secretary-General N Gopal Kishnam said in a press statement.

“There should be no exemption for any employer, and all workers,
including migrant workers, should be treated equally without
discrimination,” he said.

The current minimum wage for Peninsular Malaysia is RM900 per month.
For Sabah and Sarawak, it is RM800. MTUC is calling for a new rate of at
least RM1,200.

The National Wage Consultation Council Act 2011 states that the
council shall “at least once in every two years review the Minimum Wages
Order”.

“It is May 2015 now and the minimum wage has not been raised,” said Gopal Kishnam.

“The cost of living over the last few years has increased drastically
by the removal of subsidies and now the introduction of the Goods and
Services Tax (GST).”

He said it was unacceptable for Prime Minister Najib Tun Razak to say
at the National Labour Day celebrations in Kuching that the “minimum
wage could not be increased now”.

MTUC also voiced its concern over foreign workers who are not being paid the existing minimum wage by certain employers. - FMT, 20/5/2015

Thursday, May 21, 2015

MTUC disappointed that after 2 years and 4 months, workers Minimum Wage rates still not increased

19 May 2015

Malaysian Trade Union Congress (MTUC) is disappointed that
Malaysia will still not increase the Minimum Wage now in May 2015,
noting that cost of living over last years have increased drastically
by, amongst other reasons, the removal of subsidies and the introduction
of the Goods and Services Tax (GST).

It was reported that Prime Minister Datuk Seri Najib Tun Razak at the
at the government’s Labour Day celebrations at the Borneo Convention
Centre Kuching on 1/5/2015 ‘said minimum wage could not be increased
now’ (Star, 2/5/2015, 11MP to focus on human resources development, says
PM). This is unacceptable because it is unjust that workers in Malaysia
are required to enjoy same rate of Minimum Wages for more than 2 years
and 4 months.

National Wage Consultation Council Act 2011 in Section 25(1) clearly
state that, “The Council shall, at least once in every two years, review
the Minimum Wages Order”, and this certainly includes the Minimum Wage
Rates. Two years is the statutory maximum period before which Minimum
Wage rates should be increased, and the law is clear that Minimum Wages
could be reviewed and increased even at a faster rate depending the
effectiveness of current rates having due regard to also the
socio-economic reality of workers and their families. Clearly, the cost
of living has escalated since the last Minimum Wage Order in 2012 was
made, and this should have reasonably led to increases in the Minimum
Wage rates.

It must be pointed out that the last Minimum Wages Order 2012 (P.U.
(A) 214) was made on 16 July 2012, and since then it has been almost 2
years and 10 months – as such the next Minimum Wage Order which really
should have been made on or before 16th July 2014 is long overdue.
Workers in Malaysia should have been enjoying higher Minimum Wage Rates
at the very least since the beginning of the year – 1st January 2015.

MTUC notes that the Malaysian government has effectively denied many
workers the full enjoyment of their right to Minimum Wages as of 1st
January 2013 by reason of the various exemptions provided to certain
employers or classes of employers. MTUC also reiterates its protest on
that discriminatory nature of Minimum Wages (Amendment) Order 2013 which
created a situation where migrant workers in certain workplaces were
denied Minimum Wages for a certain period when their fellow local
workers already enjoyed this right to Minimum Wages.

Prime Minister Datuk Seri Najib Tun Razak was clearly wrong when he
said that, ‘We have only implemented the minimum wage policy for about a
year and five months…’ (Malaysian Digest, 3/5/2015, ‘Too soon to review
minimum wage’ – Najib), because the relevant Minimum Wage Order was
made in July 2012, whereby workers in Malaysia started enjoying minimum
wages on 1 January 2013 – and it has been more than 2 years and 4 months
since workers started enjoying a Minimum Wage of RM900 (Peninsular
Malaysia) and RM800 (for Sabah and Sarawak). MTUC was also unhappy about
this discrimination against workers in Sabah and Sarawak, considering
also that the cost of living in East Malaysia is higher than in
Peninsular Malaysia, a fact that is also reflected in the official
poverty line income.

MTUC calls on the Malaysian government to immediately increase
Minimum Wage rates to at least RM1,200, and this entitlement should be
made effective as of 1st January 2015. Employers should be compelled to
immediately pay all monies due to the worker by reason of the increased
Minimum Wage from the beginning of the year until the relevant date.
There should be no exemption for any employer, and all workers,
including migrant workers, in Malaysia should be treated equally without
discrimination.

Wednesday, May 20, 2015

The right to form and belong to a Trade Union is a fundamental right of workers. Why Trade Union? Well, collectively workers are stronger and are in a better position to deal with their employer, and obtain better worker rights - something that is very difficult if workers alone or in small groups try to achieve through negotiations with employers.

The right is there but access to that right in Malaysia is very difficult.

First, there is a need for REGISTRATION,

And, thereafter there is another requirement before a Trade Union can start to negotiate and enter into Collective Bargaining Agreements with their employer...The Union needs to get the RECOGNITION of their employer.

The Union applies to the employer for RECOGNITION - and good employers can easily accord recognition, but alas many an employer will try to deny recognition using a variety of reasons... This denial of recognition happens even if the majority of the workplace are already members of the said Union? Absurd and most unreasonable...

And if the employer refuses to accord recognition, the Union brings the matter to the relevant government authority - who then will proceed to have a SECRET BALLOT - which will involve all employees of the workplace who would qualify as member of the said Union. Again, bad employers can delay matters by being uncooperative ...and make even the process of working out the list of employees qualified to vote a prolonged exercise.

The longer the employer delays the process, the better for the Employer because many qualified employees may be no more workers because they were employees under precarious short term contracts - and this includes migrant workers. The list of qualified employees entitled to vote is as it was on the first date of the Union's application for recognition... and that can sometimes be many years ago...

In any event, then we have the SECRET BALLOT - and all qualified employees are entitled to vote. But, alas 'tricks' and 'threats' may be used to prevent qualified voters coming out to cast their votes. In most elections, what matters is only ballots in the box - but unjustly this is not the case when it comes to this 'Secret Ballot' - qualified voters who did not turn up to cast their ballots are considered to be persons who voted against UNION - in favour of employees. To succeed, the Union needs to get more that 50% of all qualified employees to come and cast the vote in favour of the UNION - and this is not an easy task.

Now, even if the Union succeeds at the Secret Ballot and get the required number of votes, and the Minister orders that RECOGNITION is accorded - some 'bad' employers of late have been going for Judicial Review at the High Court to challenge the outcome of the secret ballot and/or the decision of the Minister to accord RECOGNITION. When they do this, they also go for an interim order to prevent Unions exercising their rights that come with Recognition, which is primarily proceeding with the Collective Bargaining Agreement. This again denies Unions and workers at the said place their full rights as Union - and this delay can go on for months and years...Remember, even if the High Court rejects the employer's application, the employer can further delay matters through appeals to the Court of Appeal, and thereafter to the Federal Court.

At the end of the day, the Trade Union rights are just denied Malaysian workers. With the changes happening to employment relationships - where employees now are losing rights to regular employment until retirement - and more and more employees are being employed as precarious short-term contract employees or labour requirements are being met not by hiring employees but getting workers(non-employees) from third party labour suppliers(in Malaysia, now known as 'contractors for labour'). Now these supplied workers are not considered employees - and they will not be able to benefit from a Collective Bargaining Agreement, being an agreement that only benefits employee members of the trade union and the employer.

Employers are also resorting to dismissal of union leaders as a means to 'bust' unions - It may be wrongful dismissal, but the entire process to access justice and reinstatement just takes a very long time - and even, after the courts determine that a worker is wrongfully dismissed, the courts may order the alternate remedy of 'compensation in lieu of reinstatement' - and Malaysia, now has limited this to not more than 24 months back wages/benefits. The courts consider 'industrial harmony' - and likelihood of reinstatement becomes slimmer.

Hence, it is not at all surprising that the number of unionised workers in Malaysia is not rising over the past few years. It is not surprising that less than 5% of workers in the private sector are unionised. Workers in the public sector and of statutory bodies are less affected by such denial of rights. But then, the problem is that Malaysia is now more inclined towards privatization - and they too will find themselves in the same precarious position as private sector unions and workers sooner rather than later.

One example of note is the case of the The Electronic Industry Employees Union Western
Region, Peninsular Malaysia (EIEUWR)/ Kesatuan Sekerja Industri Elektronik
Wilayah Barat SemenjungMalaysia(KSIEWBSM) and its struggle at RENESAS
Semiconductor
KL Sdn Bhd (formerly known as NEC Semiconductors (Malaysia) Sdn
Bhd]

Now, here the first application for RECOGNITION was sent on January 2010. When the first application was sent, about 70%(or 1,300) of the qualified members in RENESAS were already members of the Union. Thereafter, several applications had to be send. See the following posts for more details:-

But, then the employer has applied for Judicial Review further delaying the rights that comes with RECOGNITION - and this case just recently came up for Judicial Review on 19/5/2015, and have now been adjourned to 25 June 2015

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